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President George W. Bush may turn out to be the top economic forecaster in the country.

About a month ago, he told reporters, "We're not in a recession -- we're in a slowdown." At a White House news conference a few weeks later, despite the fact that reporters pressed him to use the "R" word, Bush refused.

And on Friday, after the most recent jobs report -- which produced a much-smaller-than-expected decline in corporate payrolls, a huge 362,000 increase in the more entrepreneurial household survey (the best gain in five months) and a historically low 5 percent unemployment rate (4.95 percent, to be precise) -- the president told reporters: "This economy is going to come on. I'm confident it will."

We're in the midst of the most widely predicted and heralded recession in history. Problem is, so far it's a non-recession recession. Score one for President Bush. In an election year, it could be a big one.

First-quarter GDP growth came in at 0.6 percent. It wasn't the widely predicted decline, and economists expect that number to be revised up. Gross domestic product growth for the fourth quarter of 2007 was also up slightly, while the prior two quarters averaged over 4 percent growth.

My pal Jimmy Pethokoukis quotes Stanford professor Robert Hall, who heads the recession-dating committee at the National Bureau of Economic Research: "It seems unlikely that we would ever declare a peak-date when real GDP continued to rise."

The bad news bears always focus on areas of economic weakness. But parts of the economy are doing splendidly. This includes agriculture, energy, export firms operating in the global boom, and all manner of private-sector business, professional, health and education services. Incidentally, these are the exact sectors producing the highest-paying jobs. What's more, at 154 million employed, the civilian labor force just hit a new all-time high.

Another significant data point: Corporate profits are outperforming all expectations. With three-quarters of the S&P 500 companies reporting, profits outside the banking system have increased 10 percent over a year ago.

Profits are a dirty word on the campaign trail. Hillary and Obama, who blame American corporations for most every problem under the sun, want to tax profits heavily. With ExxonMobil and other oil companies reporting strong earnings, Democrats are now calling for a windfall profits tax. Last time we tried that -- under Jimmy Carter -- foreign energy imports rose 8 percent to 16 percent and domestic energy production fell 3 percent to 6 percent. (This according to a study by the Congressional Research Service.)

A Senate Republican group led by Pete Domenici of New Mexico has a much better idea: Expand drilling and production both offshore and in Alaska. Domenici's group estimates this would produce up to 24 billion barrels of oil, enough to cover five years of U.S. energy use without a single import.

It's a vastly better plan than penalizing American businesses and their profits, which are the mother's milk of stocks, jobs and the economy. Sen. John McCain gets this. His plan to slash the corporate tax rate is the single best proposal on the campaign trail. McCain also understands that you don't raise taxes during a slowdown. Nor do you raise taxes when the economy is bouncing back.

Right now, optimism seems to be returning to the stock market. None other than The New York Times ran a front-page story stating, "Wall Street Sees Signs of Sunshine." That's like the Daily Worker announcing the end of socialism. But let's credit the Old Gray Lady with reading the tea leaves right.

As a result of mighty efforts by the Federal Reserve, the credit crunch is easing and bond-market risk spreads are falling. The stock market just finished its best April since 2003, with the Dow running above 13,000. The Fed has come to the end of its rate-cutting cycle, and the U.S. greenback is starting to gain strength. With the dollar turning stronger, gold and other inflation signals are coming down.

Even tax rebates for working people will help a bit, although I'm no fan of temporary tax cuts. The much better idea is to make President Bush's investment tax cuts permanent. McCain is for it. Hill-Bama is against it.

Whose call is it going to be?

Recessions and slowdowns come and go in the free-market economy. But even so, it looks like President Bush -- against all odds -- may have the last laugh. If he's right on his no-recession prediction, McCain and Republicans down the electoral ladder are likely to benefit.

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